Upcoming IPO: TPG, Apax Partners-backed AI firm Fractal Analytics receives SEBI nod to float its Rs 4,900-crore IPO

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TPG and Apax Partners-backed Fractal Analytics, the India's first pure play artificial intelligence (AI) solutions provider, has received approval from the capital markets regulator SEBI to go ahead with raising Rs 4,900 crore funds via initial public offering (IPO).

The SEBI has issued observation letter on the draft document of Fractal Analytics on November 18. Now the company can float its IPO within the next one year.

Fractal proposed to raise Rs 1,279.3 crore by issuing fresh shares, while four shareholders including Quinag Bidco, TPG Fett Holdings, and GLM Family Trust will be offloading shares worth Rs 3,620.7 crore via offer-for-sale.

As per the draft papers filed with the SEBI in August this year, TPG Fett Holdings, an affiliate of the global alternative asset manager TPG Group, is the largest shareholder in Fractal with 25.67 percent stake, followed by GLM Family Trust (15.7 percent), and British private equity firm Apax Partners-owned Quinag Bidco (18.78 percent).

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Last month, Bloomberg report indicated that the Fractal Analytics is preparing to kick off its IPO as early as next month in India, seeking a valuation of around $3 billion.

As a part of fresh issue, the company may consider raising up to Rs 255.8 crore in pre-IPO round.

Fractal Analytics that provides AI solutions under two segments - Fractal.ai (comprising AI services and AI products primarily hosted on Cogentiq) and Fractal Alpha (comprising AI businesses) intends to utilise Rs 264.9 crore of fresh issue proceeds for repayment of borrowings of subsidiary Fractal USA.

Further, Rs 57.1 crore will be used for purchase of laptops, Rs 121.1 crore for setting-up new office premises in India, and Rs 355.1 crore for research and development, and sales & marketing under Fractal Alpha.

And the remainder fresh issue funds will be set aside for inorganic growth through unidentified acquisitions, and general corporate purposes.

In July this year, Fractal Analytics, founded in 2000 by Srikanth Velamakanni and Pranay Agrawal, secured $172 million through a secondary share sale.

The transaction was involved the sale of a 6 percent stake held by long-time backer Apax Partners to a consortium of 22 institutional investors including White Oak Capital Management, Gaja Capital and Neo Asset Management.

The India’s leading pure-play enterprise AI company that provides AI solutions to marquee global names like Citibank, N.A (Citi), Costco, Franklin Templeton, Mars, Mondelez, Nationwide, Nestle, and Philips has recorded profit of Rs 223 crore in the last financial year ended March 2025, against loss of Rs 49.9 crore in previous year. Revenue during the same period increased sharply by 25.9 percent to Rs 2,765.4 crore, up from Rs 2,196.3 crore.

The merchant bankers handling the Fractal Analytics IPO will be Kotak Mahindra Capital Company, Morgan Stanley India Company, Axis Capital, and Goldman Sachs (India) Securities.